The State Bank on Thursday pumped in Rs13.55 billion in
inter-bank market for one week at 11.5 per cent but the direct injection fell
short of the market appetite for funds. Consequently, banks had to borrow
overnight funds worth more than Rs40 billion from SBP through regular repo of
treasury bills at 13 per cent.

On the other hand exchanged rates fluctuated wildly in inter-
bank market and the rupee lost 35 paisa to a US dollar: It closed at 58.80 on
Thursday against the previous close of 58.45. Bankers said some ready
transactions took place at Rs58.90 to a dollar.

Bankers said the rupee continued its slide despite the money
market being tight on the back of dollar buying by two state-run and a partly
privatized bank. "These and other banks were buying dollars mostly to cover
their oversold positions," said treasurer of a bank meaning that the buyers
had earlier sold dollars beyond their limits.

Bankers said there was some corporate demand for the dollar
as well. A state-run bank tried to cool off the pro-dollar sentiment by selling
a few million of them but to no avail.

In the kerb market, however, the rupee recovered 15 paisa and
closed at 61.15 to a dollar for spot selling on Thursday up from 61.30 on
Wednesday. Currency dealers said the rupee recovered as speculators sold part of
their dollar inventories.

The inter-bank market remained speculation free as the cost
of dollar holding remained prohibitive because of liquidity crunch. An SBP
official said banks were not speculating against the rupee and the local
currency was losing its worth due to real demand for foreign exchange. But why
then the central bank injected less than expected liquidity in the market on
Thursday indicating that it would keep money market tight to stabilize rupee.

"The answer is that though the recent fall of the rupee
is not driven by speculative forces a liquid market may invite them in
action," the official said. Bankers said what refrained SBP from making a
big injection of funds into the market on Thursday was that an inflow of Rs23
billion is expected next week.

PSO slashes sulphur fuel oil price by 8.5pc

Pakistan State Oil (PSO) has slashed the price of high
sulphur fuel oil (HSFO) by 8.5 per cent or Rs957 per metric ton (pmt) to
Rs10,354 from Rs11,311 (ex-Keamari and Zulfiqarabad Terminal).

Besides, the price of light sulphur fuel oil (LSFO) has also
been reduced by 8.5 per cent or Rs1,213 from Rs14,335 to Rs13,122pmt.

The prices are to be effective from January 2 and the
reductions were possible as a result of decrease in fuel oil rates in Arabian
Gulf, Managing Director PSO, Shaukat Mirza told a press conference on Monday.

Giving further details, general manager supplies, PSO said
this is the fourth consecutive decrease in selling price of HSFO since November
17. The selling price of HSFO has been reduced from Rs13,342pmt on November 16
to Rs10,354 from January 2.

He said the selling price of LSFO has been cut from Rs15,307
on November 16, to Rs13,122pmt, showing a fall of 14.3 per cent. The HSFO price
on the deregulation on July 1 was Rs11,132pmt.

SSGC plans investing Rs4bn

Sui Southern Gas Company Limited (SSGC) is poised to invest
Rs4 billion over the next two years under a 'gas infrastructure rehabilitation
and expansion project (GIREP)'. The Managing Director SSGC, Mukhtar Ahmed told
reporters and financial analysts at a presentation on Thursday.

He said that of the total sum, roughly a billion rupees would
be invested during the current year. "The company is in the process of
appointing lead managers to raise Rs1 billion from issue of Term Finance
Certificates (TFCs)", he said.

The foreign exchange component of the total investment, will
be of $32 million and local currency investment Rs2,254 million. The projects
include: Relocation of Compressors at Hyderabad; ILBP Rehabilitation;
Integration of Zamzama at Dadu; Integration of Bhit; Augmentation of ACPL and
Augmentation of Bin Qasim Supply System.

Capital raised to Rs5m

The State Bank of Pakistan on Tuesday issued a new code of
conduct for authorized money changers that makes it mandatory for them to be an
income tax payer.

The code of conduct says money changers intending to
establish more than one branch should have a net capital of at least Rs5 million
and those intending to set up a single office should have net capital of Rs2
million.

Currently the limit of net capital for money changers is half
a million rupees.

Fresh FCY deposits fall

Fresh foreign currency deposits of banks fell to $422.7m on
Dec 30 from $481.7m, a month ago as a stable rupee left little charm in holding
dollars.

A State Bank letter informed all banks on Sunday (Dec 31)
that up to Dec 30 it had $422.7m worth of FCY deposits of banks placed with it,
after June 5, 1999. These deposits were part of gross liquid foreign exchange
reserves worth $1.437bn on Dec 30. In other words the country had net foreign
exchange reserves of $1.015bn — slightly more than one-month import bill.

CU Life

Commercial Union Life Assurance Company (Pakistan) Limited
notified on Sunday that it proposed to raise the authorized capital from Rs500
million to Rs1 billion. A special resolution would be moved at a shareholders'
meeting on January 24.

SSGC

The board of directors of Sui Southern Gas Company (SSGC) has
declared 15 per cent bonus shares in its 46th annual general meeting. SSGC
earned Rs1,509 million in 1999-2000 and the after tax earning per share stood at
Rs1.36 per share on the outstanding shares at the year end, lower by Rs0.27 per
share to the previous year due to increased capital base and higher taxation.

PTCL dividend

Pakistan Telecommunication Company on Saturday declared a
22.5 per cent final cash dividend for the year ended June 30, 2000.